This Week’s Top Stories: 8% of Households Owe More Than 20% of Canadian Mortgage Debt, and Unexplained Millions From China Hit Toronto Real Estate

Canadian Real Estate

The Bank of Canada updated the public on household debt numbers, as well as gave some insights this week. The total balance of household debt reached $2.1 trillion, a new all-time high. Even more important, the bank said more than 20% of this debt is held by just 8% of households. The bank stressed how “personally vulnerable” these households are with rising rates, since they also have mortgage debt that’s higher than 350% of their gross income.

Civil litigation is a place where both sides will often air their dirty laundry in full view of the court. Sometime that dirty laundry will bring up issues that really need further investigation for answers. This particular case is one of unexplained millions from China, questionable lending practices, all-cash purchases of homes in Greater Toronto, possible mortgage fraud, and many outings to the local casino. More important, author and lawyer Joey Evans asks, “Has Canada become so complacent that we are willing to air our dirty laundry and questionable conduct in full view of the public without fear of any consequence?”

Canadian real estate prices hit an all-time high, but the gains are decelerating. The benchmark composite, which is the price of a typical home, has reached $652,400 across Canada, a 1.14% increase from the month before. That represents a 4.6% increase from the year before, the lowest increase since December 2013. While the gain is huge, the rate of growth has declined 74.78% in just over 11 months.

Canadian mortgage debt reached an all-time high, but is rapidly slowing in growth. The total balance of mortgage debt reached $1.526 trillion, a 5.34% increase from the year before. The Bank of Canada’s 3 month annualized calculations show the rate of growth has dropped 40%, to just 3.6%. This rapid deceleration is the slowest pace of growth since 2001.

Toronto Real Estate

Toronto real estate prices are making the biggest annual decline since 2009. The benchmark price has reached $766,300, a -5.15% decline compared to last year. Just half a point more, and this would be the largest decline since CREA began publishing benchmark prices.